Is AZO's gross profit growth sustainable in 2024?

**AutoZone's gross profit growth in 2024 is likely to be sustainable**, considering the following points: 1. **Stable Gross Margin**: AutoZone's gross margin for the second quarter of 2024 was 40.53%, which is relatively high compared to the industry average. This indicates that the company has been successful in maintaining its pricing power and controlling costs. 2. **Consistent Revenue Growth**: The company's revenue increased sequentially by 3.33% in the second quarter of 2024, which is a positive sign for sustainability. This growth in revenue can support the company's gross profit margin over time. 3. **Industry Position**: AutoZone's position as a leading retailer and distributor of automotive replacement parts and accessories gives it a competitive advantage in the market. This competitive edge can help the company maintain its gross profit margins. 4. **Strategic Initiatives**: The company has been modernizing its business with new technology and implementing a transportation management system. These strategic initiatives can improve efficiency and potentially lead to better gross profit margins. 5. **Financial Strength**: AutoZone's strong financial position, as evidenced by significant liquidity and the repurchase of $15 million in stock during the quarter, provides a solid foundation for sustaining gross profit growth. However, it's important to note that the sustainability of gross profit growth depends on various factors, including market conditions, competition, and economic trends. While the above points suggest that AutoZone's gross profit growth in 2024 is likely to be sustainable, ongoing monitoring of these factors is necessary to ensure continued success.